Design thinking for entrepreneurs and small businesses (PDF Book)


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Design thinking for entrepreneurs and small businesses (PDF Book)

  1. 1. This book was purchased by For your convenience Apress has placed some of the front matter material after the index. Please use the Bookmarks and Contents at a Glance links to access them.
  2. 2. Contents Foreword ������������������������������������������������������������������������������������������������� ix About the Author����������������������������������������������������������������������������������� xi Acknowledgments��������������������������������������������������������������������������������� xiii Preface���������������������������������������������������������������������������������������������������� xv Chapter 1: Introduction to Design Thinking ������������������������������������� 1 Chapter 2: The Role of Research in Design Thinking������������������������ 17 Chapter 3: Designing a Business Strategy������������������������������������������ 31 Chapter 4: Designing Live Customer Experiences�������������������������� 39 Chapter 5: Designing Digital Customer Experiences������������������������ 53 Chapter 6: Designing Services and Service Delivery���������������������� 67 Chapter 7: Designing Marketing�������������������������������������������������������� 77 Chapter 8: Designing for Change������������������������������������������������������ 93 Chapter 9: Designing for Growth���������������������������������������������������� 103 Appendix A: Case Studies ������������������������������������������������������������������ 117 Appendix B: Metrics for Design Thinking ������������������������������������������ 127 Appendix C: Glossary of Design Thinking Jargon������������������������������ 133 Appendix D: Resources������������������������������������������������������������������������ 137 Index������������������������������������������������������������������������������������������������������ 149
  3. 3. CHAPTER 1 Introduction to Design Thinking Combining Creativity and Analysis in Business In the past couple of years, the term design has been thrown around quite a bit in various business contexts. We’ve heard of user design, experience design, social design, integrated design, service design, and place-based design, in addition to the term with which we are most familiar: graphic design. Although design was once the sole domain of graphic designers—those professionals with the artistic skill to create logos, advertisements, signage, and printed materials of all sorts—you can now find a plethora of professionals in other industries describing themselves as designers. Depending on how they approach their work, the term designer might be quite applicable, and here is why: Design in its current use in business vernacular describes a datadriven, purposeful intent behind an action, and that intent occurs to affect a specific, measurable business outcome. If you approach your business with this kind of intent, regardless of its industry, size, age, niche within the marketplace, or geographic location (or lack thereof for online-only enterprises), then you, too, are a designer.
  4. 4. 2 Chapter 1 | Introduction to Design Thinking If you can begin to think like a designer and learn some of the tools designers use regularly to drive growth and success, then myriad doors of possibility will open. ■ Note  No matter what kind of business you’re in, and no matter the size, it will be of benefit when you and your fellow employees consider yourself designers. It’s a useful—and profitable— way to plan and execute your initiatives. What Is Design Thinking? Do an Internet search of “design thinking” through your favorite search tool, and you’ll turn up an absurd number of results (several hundred thousand at the time of this writing). In the simplest of terms, design thinking is an exploratory approach to problem solving that includes and balances both analytical and creative thought processes. Tim Brown, CEO of IDEO, a renowned design and innovation firm, and arguably the first champion of design thinking in business, wrote this of design thinking in Change By Design: “Insofar as it is open-ended, openminded and iterative, a process fed by design thinking will feel chaotic to those experiencing it for the first time.”1 No truer words have been written about design thinking. It will feel chaotic the first time, and probably the second and third times, and maybe even the fourth time you put it to use. Design thinking is not a typical skill set learned in business school, but a valuable skill that should be embraced by all business professionals, not just those in a “creative” industry or for whom design is front-and-center in their job description. Design thinking is an egalitarian skill set that can be learned, practiced, and championed by professionals across industries and job titles. Design thinking is largely nonlinear and fluid, as most explorations are—or at least should be. A true exploration is not a forced march between Point A and Point B, but a meandering trail that ends at the defined destination of Point B yet allows for the flexibility to observe the landscape along the way and, perhaps, discover something new or previously overlooked. The circuitous nature of design thinking does not derive from a designer’s lack of the discipline needed to be organized and deliberate. Much to the contrary, design thinking is purposefully intended to be circuitous and fluid as a challenge to the conventional means of problem solving. Tim Brown, Change By Design (New York: HarperCollins, 2009), p. 17. 1
  5. 5. Design Thinking for Entrepreneurs and Small Businesses We are experienced in (and some may argue trained in) asking, “What’s next?” when working toward solving a problem. (I blame algebra and its necessarily rigid adherence to a sequential order in problem solving.) In design thinking, there isn’t always a specific “next” to which we should proceed. Each phase of design thinking could yield multiple “nexts” as possibilities, and it is up to us—the design thinking team—to determine which “next” to pursue. Admittedly, this can be a little confusing at first. Perhaps most important, design thinking is an iterative and rapid process that can be applied to even the most confounding business challenges, and it is a strategic activity that will identify clear opportunities that you can act on quickly. The Phases of Design Thinking Given design thinking’s adaptable, flowing nature, no one can truly say with strong conviction, “This is the way design thinking happens.” There are defined phases in the approach that serve as excellent signposts indicating you are making progress. However, the work that happens within each phase can vary wildly depending on the challenge at hand. Let’s begin with a high-level review of the phases of design thinking, after which we’ll dive deeper into each to better understand what happens and how it fits into the bigger design-thinking picture. Phase I: Understand Understanding your business challenge is imperative to identifying and creating a solution, and the degree of understanding goes well beyond that of conjecture or your previous history with challenges of a similar nature. Understand Phase II: Define Once you understand the challenge at a level of detail that reveals subtle nuances you likely would have missed without taking the time to develop that understanding, you can clearly define in specific terms what the challenge is and why it needs to be addressed. Define 3
  6. 6. 4 Chapter 1 | Introduction to Design Thinking Phase III: Ideate Now that the challenge is defined and you Ideate know what problem needs to be solved, you can unleash your creativity and begin imagining solutions. Ideation is by far the phase that everyone enjoys most, and because of that, many teams get bogged down here. Teams are also tempted to jump ahead to this phase, completely forgoing Understand and Define. Avoid both tendencies at all costs, or you very likely will generate a wealth of fantastic ideas that aren’t relevant to the challenge or go off on fantastic tangents. Phase IV: Prototype Once you draw the ideation phase to a close, the next step is to cull through the idea inventory and select the cream of the crop. These are the ideas Prototype you’ll take into the prototype phase. Be judicious in your selection of ideas—specifically the quantity of them—because you will need to create a prototype of each one. As a good rule of thumb, you’ll want to plan on prototyping at least two or three ideas. Prototyping will start to give your ideas depth, so you can get an impression of how they will take form in reality. Prototypes aren’t always tangible items. It is just as important to prototype a service, experience, process, or other intangible. ■■Note  In design thinking, you prototype not just products but also services, experiences, processes, and other things most would consider intangible. Phase V: Test Testing will help you save money during development and avoid potential disaster. This sounds dramatic, but it’s true. Testing will keep you from committing resources to a project only to find out that you were on the wrong path. The Test upside is that testing doesn’t have to be complicated or expensive.
  7. 7. Design Thinking for Entrepreneurs and Small Businesses There you have it: design thinking, a process of only five phases. What is critically important to understand about design thinking is that the process does not always consist of a direct line from Point A to Point B through the phases. As you work through the process, you may find you need to back up and repeat a phase. For example, you could find that in the Define phase, you don’t have quite enough data to help you clearly articulate the challenge you’re facing, and therefore you need to go back to the Understand phase and do a bit more research. Or you could discover in the Prototype phase that one (or more) of your ideas can’t be constructed as you had hoped, and you need to Ideate some more. You could even discover in the Test phase that your prototypes all bombed, and you need to start over with the Understand phase. How you move through the design-thinking process is determined largely by the quality of your work in each phase. Stay focused on each phase as you’re in it, without taking a look at the horizon for the next one. If you look too far ahead, you might miss something critical. A Deeper Dive Now that you’ve waded into the water and have a better understanding of design thinking, it is time to take off the floaties and dive in to get a more in-depth grasp of each phase of the process. Understand Creating a solution to your business challenge is next to impossible without some clear understanding of what your challenge entails. The nature of the challenge may appear to be one thing on the surface and something else entirely once you peel back the visible layers. Consider this example: a local hospital has seen its share of births decline since a competing facility opened nearby. The new facility offers a few distinct patient benefits, such as advanced security and a catered dinner in-room for the new parents, which the local hospital doesn’t offer. The local hospital leadership believes those benefits at the competing facility are luring patients away from their hospital. On the surface, that scenario seems plausible, and the local hospital leadership makes plans to counter the competitor’s benefits with some new ones of their own, such as an easier admission process and limo service for parents to take their babies home. A competitive environment with more options and benefits for the patient seems like a smart business move, right? 5
  8. 8. 6 Chapter 1 | Introduction to Design Thinking How does the local hospital leadership know that their new benefits will sway a patient’s choice? Have they talked to their prospective patient group? Have they asked expectant parents what services and benefits they want from a hospital, and which are most important to them? Have they asked new ­ arents why they chose the hospital where their child p was born? Rather than rushing to judgment and adding benefits as the answer, the local hospital leadership needs to take the time to understand their potential patients’ needs and wants. How can middle-aged men understand what the twenty- and thirty-something expectant moms need and want in a hospital? The best way to do that is through research, which I cover more extensively in Chapter 2. More often than not, especially when revenue is on the line and a business’s key performance indicators are watched very closely by investors and other stakeholders, leadership will make a decision based on their past experience in the industry, a measured guess based on market trends, their gut instinct, or a combination of all three, when what is needed most is accurate data derived from research. Although taking the time to do the research during the Understand phase cannot guarantee a better performance than going with your gut, it will give you a much stronger and more accurate foundation from which to make decisions and will give you more confidence that the decisions you make are the best options. Define At the conclusion of the Understand phase, you should have a fair amount of data, both quantitative (think numbers, scaled responses, answers that can be measured) and qualitative (typically responses to open-ended questions). The quantity of data is completely dependent on the extent of your research and the nature of your industry. At a minimum, you need enough data for developing a comprehensive assessment of the situation or challenge at hand. From that assessment, you can define the specific business challenge you face. Continuing our example of the local hospital, let’s say the assessment of the research data reveals that the patients going to the competitor facility aren’t choosing to give birth there because of its benefits but because it offers a more advanced level of neonatal care, which calms expectant moms’ fears of possible health complications for the baby during birth. That’s the “a ha!” moment for the local hospital leadership.
  9. 9. Design Thinking for Entrepreneurs and Small Businesses The opportunity to change patient behavior and regain market share lies not in creating additional benefits for new parents. The opportunity lies in ­ aking appropriate investments in talent and technology to develop m a ­ eonatal unit. The business challenge defined becomes: “Design an n advanced-care ­ eonatal unit for the local hospital and allocate the funds n needed to develop the unit to be competitive in the market.” That’s quite a bit different from how the business challenge for the local hospital might have been defined if the Understand phase was bypassed. Ideate As mentioned earlier, this is the phase that people enjoy most. With the challenge defined, now is the time to dream up how to solve it. Brainstorming, another name for ideating, dominates this phase of design thinking. To get the most out of brainstorming, you truly need to suspend reality, disregard the typical parameters for business operations, check your ego at the door, and repeat to yourself, “There are no bad ideas.” Be very deliberate in identifying the individuals you want to be on your brainstorming team. The nature of your business challenge will help dictate who those people are. Your goal here is a heterogeneous group built around a core of individuals that closely resembles your target market through ­ emographics and psychographics. Diversity is your friend. Don’t d default to including only your senior leadership or subject matter experts during the Ideate phase. Branch out and include a mix of employees from various levels in the organization, including someone from operations, who will lend a broad perspective. You may consider inviting trusted vendors, thought partners, and even friends and family members to join you to offer an outsider’s viewpoint, as well. Entrepreneurs might consider including funding partners. Although diversity in your brainstorming group is important, the number of people involved is equally important. You need enough to create some enthusiasm and provide varying viewpoints, but not so many that the activities get unwieldy or warring factions of opinions arise. I prefer groups of no fewer than three and no more than ten. Once you have your brainstorming team selected, schedule a two-hour block of time in which to brainstorm. You’ll need at least one two-hour block and perhaps additional blocks depending on the nature of the challenge to be solved and the productivity of the group. Remember, you will need to prototype at least two solid ideas for testing, so don’t get caught up on one great idea and decide you’re done. Keep exploring the challenge from all angles. 7
  10. 10. 8 Chapter 1 | Introduction to Design Thinking ■ Tip  While there are no bad ideas during the Ideate phase, they can sometimes be off topic. Honor those off-topic ideas by documenting them in a “parking lot” area to hold for future consideration. Brainstorming or ideation sessions can easily go off the rails and disintegrate into wasted time and occasionally hurt feelings. Here are five key rules to keep your group on track, productive, and positive. 1. Declare your intention: Under no circumstances should you enter a brainstorming session without a clearly articulated intent of what you aim to get out of it, and be sure to communicate that to your group ahead of time. You want everyone participating to be working toward the same goal in a brainstorming session. By communicating your intent ahead of time, you prime the pump, so to speak, and your team will likely spend some time thinking about your challenge in advance of the session. 2. Everyone is equal: In the real world—the one o ­ utside of the brainstorming session—the president of the ­ ompany carries more weight than an accountc ing assistant. During brainstorming, everyone is equal regardless of his or her role in the company or place in the hierarchy. There is no seniority, and the only authority in the room is the one chosen to be the moderator. Everyone is free to speak, and everyone is obliged to listen to the speaker. Period. 3. All things in moderation: Prior to the session, select someone to be the moderator. This person should be adept at facilitating conversations, asking pertinent questions, and documenting what is said or done. This person must also be comfortable redirecting the conversation if it’s gone off on a tangent, appropriately interrupting if someone is dominating the conversation, and moving the discussion along if it gets bogged down in one particular area. Ideally, the moderator you choose has no “skin in the game” and therefore no selfinterest in the outcome of the brainstorming. If you can afford to contract with an independent moderator or facilitator, do so, particularly if you have a headstrong group that needs to be guided by a firm and unbiased hand.
  11. 11. This book was purchased by Design Thinking for Entrepreneurs and Small Businesses 4. Write it down: Every idea, thought, or question needs to be documented. Do not rely on anyone’s memory to recall the outcomes from your brainstorming session. Documentation is key! You’ll want to be able to refer to what occurred with accuracy. I prefer to document brainstorming sessions in two ways: by themselves or combined. The first method is with sticky notes. Choose three ­ olors: one for c ideas, one for thoughts, and one for questions. Each idea, thought, or question gets written on its own color-coded note. I repeat, each gets its own note. You may want to sort these later, and if you have to cut a sticky-note in half because it contained two separate ideas, it’s likely the halves will get lost. The second method is to document the discussion on a white board, but again assign a different color to each statement category (idea, thought, question). Be sure you photograph the white board before erasing it. Every cell phone has a camera; use it. In fact, have several people take several pictures as a precaution. 5. Let the sillies out: Whether your group is experienced brainstormers or new to the activity, they will inevitably feel a bit awkward at the beginning, and that usually leads to a case of the sillies: outlandish ideas that contextually make no sense but are contributed as a kind of joke to break the ice. That’s normal and okay. Just let the sillies flow and get them out of the group’s system so they can concentrate on the challenge at hand. Two things to note: the sillies should not be confused with “bad ideas” because there are no bad ideas during brainstorming. Second, if you have a recurrence of the sillies toward the end of the brainstorming session, you’ve run too long and it’s time to wrap up, even if there is still time left on the clock. Tying back into our neonatal unit example, your group may have ideas ranging anywhere from developing its own unit to collaborating with another provider to supplementing its own services to tapping into emerging technology to fill the gap. 9
  12. 12. 10 Chapter 1 | Introduction to Design Thinking Prototype At the end of brainstorming, you likely have a slew of ideas occupying space along the continuum from “awesome” to what the hell were we thinking? You may be a bit overwhelmed with the volume of ideas and struggling to sift the chaff from the most delightful morsels. This is where the Prototype phase begins, and you start to see its value. Once you’re finished with the Ideate phase and have moved into the Prototype phase, it’s time to put the business operations parameters back into play and view your ideas through the lens of reality. In doing so, you can begin to separate your brainstorming ideas into categories of what is doable, what is possible, and what is so far-reaching that it will require too many resources to pull off. ■ Tip  After you’ve sorted the ideas from the Ideation phase, pack up the notes about the far-reaching ones and save them. You never know when they might trigger other ideas down the road or evolve into possibilities. Now that you’ve organized your ideas, meet with your operations team or leader and take a close look at which ideas are the most viable to try given your current state of resources—capital, time, and talent—and which could make the greatest positive impact toward solving your business challenge. Where these factors overlap is where the opportunity lies. Visually, this looks like a Venn diagram (Figure 1-1). Understand Figure 1-1. Where your available resources, doable ideas, and potential impact overlap is the “sweet spot,” the area in which your opportunities lie.
  13. 13. Design Thinking for Entrepreneurs and Small Businesses The ideas that lie in the sweet spot should be the ones for which prototypes are developed. Wondering what you should do if there aren’t any ideas in the sweet spot? Go back to the Ideate phase and brainstorm some more. Ideally, you will have two or three ideas in the sweet spot. Trying to prototype any more than that will get to be overwhelming and potentially costly. To start building your prototypes, select the idea that you think will require the least amount of resources to be a starting point. It will ease you into the prototype process and is more likely to be a successful and enjoyable activity for your team. Remember, it doesn’t matter if the idea you are prototyping is a material object, a process, or an experience. It still needs to be fleshed out to a point that it can undergo enough viable testing to prove that it works and has the potential to succeed. Returning to the earlier example of the local hospital that needs to design a neonatal care unit to better compete in its market, the Prototype phase could include a physical mock-up of an actual department, with furniture and equipment, in a repurposed existing space within the hospital. There may be a prototype of new construction needed to create the neonatal care unit. Or perhaps there is a technology solution, such as remote patient monitoring and high-risk protocols, that can be introduced through new workflows and collaborations that need to be prototyped. Give the prototypes as much detail and specificity as possible. When you enter the Test phase, you’ll want to have as complete a prototype as possible so that your test subjects aren’t put in the position of providing feedback based on conjecture. Test Now that you have at least two prototypes developed, it’s time for the Test phase. Frankly, my blood pressure goes up any time I hear the word test, but that’s an illogical response with this type of test. Testing prototypes keeps you from charging down the wrong path, and spending way too much money and other resources on a potential solution only to discover that it doesn’t work like it should. Testing is a good thing. Testing can be easy and inexpensive, which is also a good thing. How to test your prototype depends on what it is. We’ll cover this in more specificity in the chapters ahead, but we touch on the common elements of testing here. Your testing participants should mirror the users for whom the solution will remedy the business challenge, and should include key stakeholder 11
  14. 14. 12 Chapter 1 | Introduction to Design Thinking groups who are affected by the implementation of the solution. In the local hospital example, the testing participants could include expectant mothers, obstetricians, neonatologists, nurses, respiratory therapists, and facility operations staff—perhaps even mothers of children born in neonatal care units in other hospitals. Gathering feedback from different users and stakeholders will yield an array of perspectives. Testing is one area in which diversity needs to be controlled. Although you may be testing your ideas among various groups, you will want to organize your testing participants by type—nurses with nurses, and so on—to get the most out of the activity. By keeping like participants together, you can capitalize on their shared knowledge and perspective, which will help keep the testing time shorter and the feedback focused. This will improve the likelihood that they will suggest modifications to the idea. ■ Tip  Make sure your testing participants are the types of customers who would use your product or service. If your service is designed for nurses, don’t test the service on teachers. How do you find testing participants? Start in your own back yard with your contact list and just ask. You’ll be surprised by their willingness to help. However, you may need participants with very specific demographics, like a nurse with more than five years of experience working in a hospital e ­ nvironment. In that case, you can still recruit through your own network by asking your contacts to forward your need on to others they may know. You can also recruit through Craigslist, use Facebook advertising (which is very affordable), or ­ etwork through professional associations. n If there isn’t a conflict of interest, you could approach another business entity—such as a hospital system for our nurse example—and uncover opportunities to communicate with and recruit their employees. ­ Regardless of who your participants are or what you test, the participants need to sign a nondisclosure agreement and a noncompete agreement prior to any discussions of or interactions with your product, service, or process. They also should be made aware that the testing sessions probably will be documented with audio and video recording for research purposes only. If a participant refuses to sign the agreements or does not want to be recorded, I strongly recommend they be excused from the Test phase. When the agreements are signed and complete, you need to give the participants an appropriate overview of the context prior to any testing. Using the local hospital example, it would be critical to explain to the participants the challenge the administration is trying to solve and the solution the prototype represents. Then the participants will be prepared to provide meaningful feedback.
  15. 15. Design Thinking for Entrepreneurs and Small Businesses Although testing can be done inexpensively, do not skimp on providing food and beverages. This is not only hospitable and appropriate but also a strategic maneuver to encourage the group to relax and feel welcome. You may also consider offering modest cash compensation. Although not required, it is a smart consideration if the product, service, or process you are testing is complicated, requires a great deal of input or effort on the participant’s part, or if recruiting participants becomes difficult. Keep the testing atmosphere light and relaxed. You want your participants to feel welcomed, comfortable, and valued, and you want to portray yourself and your team as welcoming, open-minded, and collaborative. The location of testing is again dependent on what you are testing. We are all familiar with the stereotypical focus group room with one-way glass, on the other side of which sits the client and his or her entourage observing the testing. Those facilities can be found—and rented—in most large cities. However, that kind of formality and expense is far from necessary. More common locations are on the business’s premises, in an online environment, and in the field, particularly if your means of testing does not include focus groups. As was important during the Ideate phase, documentation is critical in the Test phase. You will want to refer back to what was shared by the participants with accuracy, because their feedback will affect directly the future development of your product, service, or process. During the Test phase, I highly recommend the use of an impartial moderator or facilitator, as well as both written documentation of the testing process and outcomes, and audio/video documentation. As a general rule, once I start recording a testing session, I remind participants that the session is being recorded for documentation only to assist with reporting on the testing outcomes. Selecting one prototype from our neonatal unit example, new construction of a unit, one testing scenario might consist of participants playing their specific roles—expectant mom, nurse, administrative assistant, physician—as they “walk through” the construction mock-up and narrate their experience. Expectant moms would give input on what they like and what they don’t like about the check-in process, what they think is missing in the labor and delivery room that would improve the experience, and what amenities you may have included that don’t make an impact. Physicians and nurses would provide feedback on their experiences as well, but because their points of view are entirely different, you’ll get different data. With testing, you are aiming to uncover insights from all users that would culminate in creating a neonatal care unit that satisfies their needs and wants, while at the same time providing a solution to your business challenge, with the specific purpose of shifting market share your way. 13
  16. 16. 14 Chapter 1 | Introduction to Design Thinking Once your stakeholder groups have tested the product, service, or process, gather all of your documentation, give your left brain a jolt, and get ready to analyze the results. It’s not as hard as it sounds, really. This kind of analysis involves a lot of compare-and-contrast activity. First, review the data from each stakeholder group on its own merit. Look for common themes in participants’ comments, reactions, and suggestions. If you included audio/video documentation, look for common themes in participants’ facial expressions and other nonverbal cues, particularly in response to a moderator’s questions or as correlated with a specific action as part of the test. Then look across the stakeholder groups, comparing the common themes you documented during individual group analysis. Themes that are shared across user groups indicate a more universal concern with the product, service, or process, and you’ll need to pay close attention to those, because they will affect your work on a larger scale. Themes unique to a stakeholder group may indicate a specific need that should be addressed, but not necessarily with the product, service, or process you are currently testing. You will follow the same analysis for each of the prototypes you tested. (Are you getting a better understanding of why I recommend limiting your prototypes to only two or three?) Once the analysis is complete for each prototype, you want to pull back and look at the whole picture by comparing the prototypes to one another. Common themes will indicate areas that need to be remedied regardless of which prototype moves forward to production, so acknowledge those but don’t spend too much time on them at this point. Look for the themes unique to a specific prototype and consider their importance to developing a successful solution to your challenge. If one theme is perceived to be more critical than others—perhaps because your most important stakeholder group identified the theme—compare its needs to your available resources. Can you allocate resources appropriately to satisfy the theme’s needs and therefore improve the chances of success for the product, service, or process? Conversely, are there several themes that will require smaller investments but collectively yield a bigger effect and potential for success? By the end of the Test phase, there is a lot of data, some lingering questions, and a bit of gut instinct. However, there are no right answers. The only “right” answers are those derived from that data and those that you determine to be the best for accomplishing your business’s goals.Gather your team and review the testing results. Did they prove or disprove the basic premise that one (or more) of the solutions you presented for testing actually will solve the business challenge you face? Did one solution perform better than others, or did they all test well? Did they all fall far below expectations?
  17. 17. Design Thinking for Entrepreneurs and Small Businesses If none of the solutions tested performed well, you need to stop and take a hard look to determine why. Answering the “why” will help you determine to what point in the design-thinking process you need to return. Some questions to ask: Did you have the appropriate testing participants, and did you provide them with relevant context? Were the prototypes understandable, and did they align with the testing parameters? Were the potential solutions strong enough, or do more ideas need to be generated? Is it possible that the business challenge wasn’t defined clearly enough? Backing up in the design-thinking process is frustrating, but it doesn’t need to be disheartening. No one gets the solution correct the first time, every time. Consider this: prior to the design-thinking process, your arsenal of weapons for solving a business challenge consisted of gut instinct, assumptions, and a modest amount of data. At the end of the design thinking process, you have nearly the opposite—a lot of data, clarity of purpose, and a little bit of gut instinct to add some flavor. Summary We started our review of design thinking at the 30,000-foot level, and then dove deeper into its five distinct phases: Understand, Define, Ideate, Prototype, and Test. We reviewed the importance of understanding what your business challenge truly entails. We covered how to specifically define the business challenge so you can ideate with purpose. And we discussed the need for prototypes and testing to help ensure that you are on a path toward a viable business solution. You may feel as though you’re drinking from a fire hose; this is a lot of information to consume at once. Furthermore, I’m asking you to internalize this information using a way of thinking with which you may not yet be comfortable. If you are feeling unsure about how to proceed with design thinking, don’t worry. It’s normal, and I’ve been there. As with any new undertaking, practice and familiarity will lead to confidence. The following chapters will explain how to implement design thinking in specific business scenarios, with examples and special tips to help you integrate it into your own business. By the end, you will know yourself to be a designer. 15
  18. 18. CHAPTER 2 The Role of Research in Design Thinking Don’t Assume: Ask! Data can be intimidating, elusive, and enlightening. Obtaining it, specifically taking the time to conduct meaningful research, can seem like an obstacle to progress. It’s not. Research facilitates progress’s emergence from the primordial soup of data so it can begin to take shape and form a solution. When faced with a business challenge and using design thinking to help develop a solution to the challenge, you need research. Your initial reaction is probably one or more of these three: • I don’t have time for research. • I don’t have the budget for research. • I don’t have the patience for research. Sadly, most small businesses and entrepreneurs will skimp on research when time and budget are perceived issues. In this chapter, I demonstrate that you do have the time, budget, and patience for research, and that research is an absolute imperative in design thinking to keep you from chasing rabbits down trails that lead to nowhere.
  19. 19. 18 Chapter 2 | The Role of Research in Design Thinking Design Thinking Research Is Different Research in the design thinking context is not the static search we employed during late nights in the library or online hunting for facts to support our theses. It is not simply a means to an end. In design thinking research is an inquisitive quest for insights and perspectives that constantly evolves and truly has no end. It is purposeful in its pursuit of information, and it uses the results to inform business decisions. Research in design thinking takes the form of asking a question—which can be done in numerous ways—and documenting the answer. Research doesn’t need to be large-scale quantitative surveys that undergo regressive analysis to arrive at actionable answers. (Thank goodness, because how many entrepreneurs and small-business owners can conduct regressive analysis? Not I.) Nor does design thinking research need involve expensive, elaborate, in-depth, long-term qualitative studies. ■■Note  Design thinking research is purposeful, affordable, and actionable. Why assume when you can know? Granted, design thinking research certainly has the capacity to be as elaborate as your budget and time will allow. Most notably, it can be inexpensive, simple, and scalable. What it fundamentally cannot be is omitted. Quantitative versus Qualitative For our discussion, we classify research into two categories: quantitative and qualitative, often referred to as “quant” and “qual.” Each has its own strengths and weaknesses; neither is superior to the other. There are some business cases in which it is perfectly acceptable to conduct only one of the two research categories, but these are few and far between. I recommend that you refrain from putting all of your research eggs into one category’s basket, because a balanced approach will be more informative and more likely to reveal a broader scope of opportunity to develop solutions to your business challenge. Eschewing one type for the other will not save you any time or money, so plan for both. The “Quant” Quantitative research is characterized by its focus on measurable data that can be extrapolated and applied to a population greater than the one tested. It is commonly used to gather demographic data, measure opinion 4
  20. 20. Design Thinking for Entrepreneurs and Small Businesses using a predefined scale, and collect customer or user behavioral data. Surveys are the poster children of quantitative research because they can be constructed, distributed, and evaluated easily. Whether delivered online, via telephone, or through regular mail, surveys collect data in limited categories using predominantly closed questions. The length of a quantitative survey typically is dictated by what data are known currently and what data need to be collected to complete the desired data set. Quantitative data can also be gathered through web analytics (page views, original visitors, click-throughs, etc.), point-of-sale software, online polls, and customer feedback forms. The “Qual” Qualitative research is characterized by its exploratory nature. It is more about depth than breadth, and results are not as easily extrapolated to larger populations. However, the information collected is rich in a level of detail and nuance that isn’t possible in quantitative research. The stereotyped image of qualitative data is the focus group. Despite focus groups being characterized and parodied in popular media, this interview method is valuable because it provides an opportunity for deeper exploration into the consumer’s opinions, purchasing behavior, and lifestyle factors that might influence that behavior. The nature of the topic being researched will dictate the type and size of group and the demeanor of the interview. If you are discussing potty training with a group of young parents, the questions will likely be light and humorous and the atmosphere convivial. However, if you are discussing financial investments and retirement funds, the questions will take a more serious tone, and the atmosphere will likely reflect that. Other means of gathering qualitative data include one-on-one interviews, in-store interceptions (in which a shopper is interrupted briefly to be asked questions about their immediate purchasing decisions), and observation of your potential consumers in their natural habitats. The Four Roles of Research Research in design thinking plays the roles of Equalizer, Archeologist, Interpreter, and Devil’s Advocate. Research levels the knowledge field and puts all of your team members on the same page, understanding your business challenge from the same data set. It helps uncover the roots of the challenge so you don’t take it simply at face value. It translates the needs and wants of the customer into insights on which you can take action. It can be the tempered balance to enthusiasm that shines a cautionary light on a solution’s potential flaws. 19
  21. 21. 20 Chapter 2 | The Role of Research in Design Thinking The Equalizer This book was purchased by Surveys are the ideal equalizer in design thinking research, because they can provide a measured overview of the market, the competitive environment, customer demographics, purchasing patterns, and similar broadscope views that give the lay of the land. Surveys essentially level the playing field for businesses because they can be conducted cheaply and quickly and can be quite pointed in their questions. If you find yourself working in a vacuum with no known data, surveys can remedy that situation. You can gather even the most basic of data—like customer names. Consider this scenario: you have a new formula for laundry detergent that minimizes environmental impact without sacrificing the perceived level of cleanliness that customers expect. You have plenty of industry data, and perhaps even consumer data harvested from several markets across the country. However, you haven’t launched your product yet, so you have zero customer data unique to you. You have a general idea of your target customer based on the existing information you gathered, but you want to ask specific questions to discover who among the vast universe of people who do laundry in your launch markets would choose your new greener, but slightly more expensive product instead of their usual choice. ■■Tip  You don’t have to work in a data vacuum. Use surveys to gather even the most basic information from customers to jump-start your research. You can distribute a survey to a population that looks like your general target customer and collect data from scratch. That data set might include questions about income, family size, geographic region, current product preference, frequency of use, purchase behavior, and opinions about the environment. Once the data are collected and analyzed, you’ll be able to identify the consumer groups most likely to make the switch to your product. The outcome could read something like this: “Women age thirty to forty-five with children living at home, with an annual household income of more than $60,000 who buy laundry detergent at least once every six to eight weeks, and who are somewhat or very concerned about the environment.” You now have a well-defined, specific consumer segment—supported by data!—to whom you can begin to market. Alternatively, you may have some consumer data to work with but need more details. For established businesses with modest data capture capabilities, this is common. You may have some customer contact details and past purchase history, but not much more. In that case, the scenario may look like this: you are an automobile dealer, and during the process
  22. 22. Design Thinking for Entrepreneurs and Small Businesses of selling a vehicle, you collect age, race, marital status, home ownership status, income level, and credit score data. If you accepted a trade-in vehicle for the new purchase, you also gathered data on the make, model, and year of that vehicle. At this point, you have a fairly detailed picture of your customer, but you want to know more. After the purchase, you distribute a brief survey—via mail or email—that asks the customer additional questions about his or her experience at your business (a potential indicator of repeat or word-of-mouth referral business), what other dealers they visited and/or considered before making the purchase (a measurement of who they perceive the company’s competitors to be), and how many other vehicles they own (an indicator of consumption capacity for this type of purchase). All of these data are merged with the data collected during the vehicle purchase. Combined, it goes into your database of customers, which now contains much more robust content to better inform and direct your company’s leaders when they begin to explore new business opportunities or face new challenges. The Archeologist Qualitative research, at least in my mind, resembles the romanticized image of the archaeologist, that intrepid explorer bent on unearthing hidden treasures, truths, and beliefs that can shed light on how and why we do what we do as humans and consumers. Think about it: somewhere, someone conducted some research among a group of consumers a lot like you to determine what type of teapot they would most prefer to purchase. Then they used the data from that research to design precisely that type of teapot. I find qualitative research fascinating, highly valuable, and eminently important to the design-thinking process. My preferred means of qualitative exploration are focus groups and customer intercepts. Those are the qualitative research methods we explore next. Before we jump into the details of how to conduct this type of research, it’s good to note that collecting the insights revealed during either of these activities are best recorded with video and supplemented with written notes. Fortunately, you aren’t recording for a screening at the Sundance Film Festival, so the quality of your video doesn’t have to be anything more than comprehensible. Using a video app on your smart phone is sufficient. As mentioned in the previous chapter, it is imperative to have your participants agree to recording their likeness and signing a waiver to that effect. Logistically, getting a waiver signed during a customer intercept might be a hassle, but it is always better to err on the side of caution and cover your bases. 21
  23. 23. 22 Chapter 2 | The Role of Research in Design Thinking Customer Intercepts Customer intercepts are a quick, somewhat informal way to get brief answers to limited questions that are relative to what a customer is doing in real time. To conduct these, you truly intercept customers during their activity—be it shopping for or using the product or service for which you are conducting research. Therefore, the way you approach customers is critical, as is the brevity of your interaction with them. As you are considering the questions you want to ask customers and the way you will approach them, put yourself in their shoes. Construct the intercept in such a way that if you were the customer, you would willingly answer a few questions posed by a stranger. Because our culture propagates a distrust of strangers, your countenance and body language are important in getting a response. Your actions speak louder than words here. For successful customer intercepts, the interviewer should be open, friendly, curious, approachable, and somewhat extroverted without coming across as overbearing or obnoxious. I encourage senior leadership to conduct interviews when possible, as they get the opportunity to hear the customer feedback firsthand. However, anyone on your team who matches this description would be a good choice as an interviewer. Before conducting any intercepts, determine the questions for which you need answers. You’ll want to identify no more than two main questions, with a follow-up question for each. That’s it—short and sweet. You should also think through questions that might be asked of you by the customer and formulate your answers. If your interviewer is not involved with determining the questions, be sure he or she understands what information you want to glean from this process so they are well informed going into the activity. Next, determine where these intercepts will happen. For locations anywhere other than your own place of business, you’ll need to secure permission from the appropriate people, like store managers. If you plan to conduct your intercepts in public spaces, take the time to investigate whether you need permits or permission from local authorities. Once you have your location, schedule dates and times during which you are most likely to encounter the type of customers you want to interview. Don’t just go to where your customers are, go when they are there. Let’s illustrate all of this customer intercept information with an example. You operate a small business that provides locally produced, artisanal cheese using milk from grass-fed, free-ranging goats on your small farm just outside of the city.Your cheese is distributed through a regional grocery retailer and is shelved alongside three national brands and two other local brands.You want to conduct
  24. 24. Design Thinking for Entrepreneurs and Small Businesses customer intercepts to better understand the decision-making process buyers go through when selecting goat cheese. Your interviewer is placed near enough to the cheese case to be able to see what cheese is selected but not so close that he or she is obtrusive. Once a customer selects a package of goat cheese— regardless of the brand selected—your interviewer will then approach him or her. She should introduce herself and indicate that she is interviewing customers about their preferences in cheese. She should not share the brand of the cheese for which she is conducting the interviews unless specifically asked by the customer. Sharing that information up front could influence the customer’s answers, as most people do not want speak ill of a brand directly to a brand’s representative. After the introduction, your interviewer should inform the customer that his answers are being recorded for research reference only and obtains the customer’s verbal permission (if the interview is being recorded). Then the questions can begin. In this scenario, the lead question could be “Why did you select that brand of goat cheese?” If the customer’s answer is not specific, for example, “I don’t know,” the follow-up should be more direct, such as, “Did you find the packaging more appealing than the others? Or did you select the product based on the price?” Your second main question could be about the product being locally produced and the importance that fact did or did not play in the customer’s choice. If the customer didn’t select your brand, your interviewer could inquire about what product features would prompt him to switch to your brand. At this point, the interviewer is done and should thank the customer for their help. The customer may engage your interviewer in conversation, and that is fine as long as your interviewer isn’t missing opportunities to speak to other customers. Focus Groups Focus groups are the stuff of which advertising legends are made. The focus group as portrayed in television and film—think Mad Men—is a s ­ tereotype of the experience. Although there is always some kernel of truth in a stereotype, focus groups don’t have to be expensive, complicated, or dramatic. They won’t make or break a product or service. They will, however, provide the opportunity to explore, somewhat in depth, the “why” behind customer behavior. 23
  25. 25. 24 Chapter 2 | The Role of Research in Design Thinking Marketing strategist and former psychologist George Silverman explains focus groups like this: The open-ended interaction of focus groups leads to stimulation of thoughts and emotions, the revelation of material which is not ordinarily forthcoming in an individual interview, the examination of how people in various roles interact, and the observation of important behavior.1 The open-ended nature of focus groups make the research technique appealing. They are inherently exploratory, framed by two or more investigative, collaborative activities through which a moderator guides the group to reveal relevant insights from the customers’ perspectives. Focus groups are best used when more detailed, nuanced information is needed or when the customer’s decision-making process is complicated. Health care and finance are prime examples of industries that benefit from focus group research when developing their products and services. The primary ingredient for focus groups—with the exception of target c ­ ustomers—is the moderator. I consider personality to be critical when selecting a moderator. He or she must be able to make connections with the focus group participants and quickly build a comfortable rapport, yet maintain enough distance and control to keep the group on task. The moderator is not a part of the group but is their guide. I consider moderating a group to be similar to supervising other people’s children: the moderator is friendly, likable, and engaging, but always in control. If you have the opportunity to contract with an independent moderator, I encourage you to do so. Conducting a focus group requires a certain amount of skill, finesse, and experience. If you don’t have a budget for a moderator, don’t let that be a barrier to using focus groups to your advantage. With a little studying and preparation, you could lead the group yourself. It’s not ideal, but it can be done. The second critical component for a focus group is the moderator’s guide. This is a written document that outlines how the group will spend its time together. If an independent moderator is used, the guide will likely contain granular detail, including scripted copy for the moderator’s welcome, introduction, instructions, and so on, as an added benefit to you, the client. An independent moderator will want to ensure that you are informed of all the focus group procedures. If you are serving as your own moderator, the guide should provide as much detail as you need to stay focused and communicate clearly with the group. The moderator’s guide is a document for the moderator’s own use, so it doesn’t need to be pretty, just thorough. George Silverman, “How to Get Beneath the Surface in Focus Groups,” 1
  26. 26. Design Thinking for Entrepreneurs and Small Businesses With a clear understanding of how the focus group will flow and having selected a moderator, it’s time to recruit participants. I have moderated groups with as many as twelve participants and as few as three. My ideal focus group is no fewer than three but no more than six. There is no magic to that number; I find the group size manageable for a moderator and engaging for a participant. If you have a group larger than ten, you run the risk of group think (the natural tendency of groups to gravitate toward a harmonious outcome while forsaking their individual opinions) taking hold and skewing your results. The participants you invite to the focus group should reflect the characteristics of your target market as closely as possible. Going back to our goat cheese example, if the primary target market for your product is women, ages thirty to fifty, who have children, with household incomes of more than $60,000 a year, and who exercise three or more times a week, then your focus group should consist of that same type of person. Furthermore, you should organize your focus group participants so that the group is as homogeneous as possible, for example, stay-at-home moms with stay-at-home moms, working moms with working moms. By grouping like participants together, you help create rapport among the group, and they can build on one another’s answers and thoughts. You can recruit focus group participants in many ways, the most popular and cost-effective of which include social media, your personal and professional networks, and word-of-mouth referrals. Whether you’ve selected an independent moderator or have taken on that role yourself, it is extremely valuable to summarize the focus group’s proceedings, the insights learned, the “take-aways,” and their implications within a day or two after the focus group is completed. (If you’ve worked with a moderator, a summary report should be a part of the scope of work for which you contracted him or her.) Summarizing the experience and insights soon after the focus group will help you not only document what you saw and heard, but also capture thoughts and impressions that you may not have noted while the focus group was under way. The Interpreter There is a wealth of inquiry-driven research tools that can complement focus groups or stand alone. These tools serve as interpreters of customer insight and are particularly beneficial in providing added clarity to customers’ responses to the questions asked. Without a doubt, the majority of these tools resemble games, and many of them are captured in a wonderful encyclopedic resource called Gamestorming, written by Sunni Brown, David Grey, and James Macanufo. Rather than regurgitating their work, I focus on two of my go-to interpreter tools that generate a lot of discussion among research participants and yield a lot of insight. 25
  27. 27. 26 Chapter 2 | The Role of Research in Design Thinking Photo Sort If a picture is worth a thousand words, you should use them to your research advantage. They are especially advantageous if you’re researching areas of consumer behavior rooted in deep-seated emotions, or nebulous topics such as brand personality. The photo sort activity is perfect for use in small focus groups or individual interviews. The images used in the photo sort exercise are generally sourced from magazines and the Internet, and the process of gathering the images is incredibly contemplative, prompting the researcher to think through all aspects of the exercise and the intended outcomes. Images pulled from magazines and the Internet are protected by copyright laws; you shouldn’t run into any legal issues with using them because you will use them for noncommercial purposes, as I am describing here. In practical terms, you’ll want to use images that are in color, at least as large as your palm, and on a white background. If you have to cut out an image from a magazine and glue it to a sheet of white paper, do it. If you will be using the images with some frequency, perhaps with multiple groups of research participants, then you would benefit from having them laminated at your nearest copy shop so they will be more durable. How, exactly, do you go about selecting images to use in this exercise? It is entirely dependent on the topic being researched. The key is that each image represents an emotion in some way. If you can find images that represent emotions and contain people who represent your target market, then all the better! (Those can be difficult to find, though.) At this point, the photo sort activity may seem a bit vague, so let’s consider this example: a financial services firm wants to use the photo sort activity in a focus group that will be discussing customers’ perceptions of investing money. The insights derived from the photo sort activity will help direct the firm in developing new investment products and communicating their benefits effectively to their target customer: men age fortyfive and older, married or divorced with children, and with household incomes of more than $75,000. Before sourcing the images, you and your research team (whoever you’ve tapped to help you) need to brainstorm a list of emotions or emotional states that your target customer might experience in connection with investing money. Some of those could be fear, a sense of being overwhelmed, confident, tentative, procrastinating, empowered, and disengaged. Once you have your list of emotions, the search for images begins. Major search engines, such as Google, allow you to search for images by keyword, for example “confident” or “unsure.” You can also use photo-sharing sites as a resource. You will get thousands of results, so finding the images isn’t the ­ hallenge. Selecting them is. Put yourself in your target customer’s c
  28. 28. Design Thinking for Entrepreneurs and Small Businesses mindset when you review the images and try to determine what will resonate. Your goal is to compile a collection of diverse but representative images that reflect your list of emotions and emotional states. ■■Tip  Don’t wait to build your image library. Whenever you come across an interesting or iconic image in your daily consumption of news and information, save it! With your images selected and your focus group in place, the activity begins. Using the financial services example, you or your moderator is working with a group of five men who mirror your target consumer. With the array of images spread out in the center of the table, in front of the focus group participants, you ask the question, “Which of these images represents how you feel when you think about making financial investments?” The participants sift through the images and select as many as they like. The obvious follow-up question to each participant is “Why?” Be sure to allow each person time to explain his perspective and why he chose the image or images he did. Documenting this activity, and capturing the insights revealed, is much like documenting any focus group session: audio and video recording is ideal, with additional written notes as needed. Dot Voting When researching opinion on existing products or services or perspectives on the customer experience, the Dot Voting exercise is an excellent choice. It is a good activity for gleaning insights from larger groups. This activity is like a visual manifestation of the 1–10 point rating means of measurement, and that visualization can spark wonderfully rich discussion. The activity itself is incredibly easy to conduct, which makes it universally appealing. Display a poster along one wall in which a continuum of opinion can be represented, with the least positive response on the left endpoint and the most positive response on the right endpoint. It’s helpful to provide some points of measurement along the continuum to give your participants guideposts. Consider marking the center of the continuum or marking the quarters. I recommend not going as far as to mark each guidepost, 1 through 10, on the continuum. You want the continuum to be somewhat flexible in its interpretation, save for the center or quarter marks you provided. Give each participant small round stickers—the kind you find in office supply stores that are typically in primary colors—in enough quantity to answer each of the questions you’ll be posing, with one sticker representing one answer. In the financial services example, the moderator might ask 27
  29. 29. 28 Chapter 2 | The Role of Research in Design Thinking the participants, “On a range from 1 to 10, where 1 is ‘least important’ and 10 is ‘most ­mportant,’ how important are your friends’ or families’ reci ommendations regarding investment decisions?” Then have each of your participants answer by placing a sticker along the continuum at a place that represents the importance of those recommendations. Once everyone has placed a dot, you can ask if anyone would like to share why they answered the way they did. Then, move on to the next question. To help you interpret the results, assign each question a specific color of dot for the answer. At a glance, you’ll be able to differentiate the answers by topic. To use the financial services example again, ask your participants,“How important is mobile banking?” The participants respond by placing a blue sticker on the poster along the continuum. Next, you ask, “How ­mportant i are printed monthly statements?” and the participants answer, but this time with a yellow dot, and so on. What if you have more questions than you do colored dots? You can achieve the same outcome using markers. The best way to document the DotVoting activity is twofold.First,observe the participants’ behavior and take written notes. More important, the second means of documentation is the culminating result of the activity: the poster. A tangible document in this context is generally referred to as an artifact, and it’s a wonderful representation of the activity. Save it! The Devil’s Advocate Whereas the previous research tools and activities are focused on providing feedback and revealing opportunities for the researcher, the tools that I classify as devil’s advocates are used to try and find gaps, reveal weaknesses, and generally question all assumptions associated with the product, service, or idea at the center of the research. These activities add balance to qualitative research efforts. The 5 Whys My all-time favorite devil’s advocate tool is called The 5 Whys. You’ll feel like a toddler during the process as you ask “Why” at least five times, but trust me: it reveals some great insights. The 5 Whys emerged as an effective problem-solving technique during Toyota’s pursuit of innovative improvements in its manufacturing process. Used in either a focus group setting or as a stand-alone exercise, The 5 Whys peel back the layers of perception and opinion to get to the core of what is being researched. The process is simple. Start with a premise relative to what you are researching. In the financial services example, that premise could be “Our target customer wants to manage his investments online, without the
  30. 30. Design Thinking for Entrepreneurs and Small Businesses assistance of an advisor.” You ask your research participants, “Why?” The group discusses the possibilities of why and decides that the customer wants to manage his investments online because he wants the convenience that the online environment provides. You ask, “Why does he want convenience?” The group responds, and the process continues with a “Why?” followed by a group discussion and conclusion, and so on until collectively, all participating feels like they’ve uncovered the core issue and there is no more reasonable answers to “Why?” In the financial services example, ultimately the core could be that the customer doesn’t want to pay a service fee that he assumes would be involved if he worked with an advisor. The 5 Whys can be used in a focus group setting or online via a collaborative platform such as Basecamp2 or even through an online survey service, such as Survey Monkey,3 by using open-ended questions. Audio/ video recording is the best choice for documenting the activity if you are conducting it live with a group. The data capture from conducting the activity in an online format is sufficient documentation, as it produces an artifact that can be saved and referred to repeatedly. ■■Caution  Devil’s advocate activities and tools can easily take on a negative tone and turn into gripe sessions. Be alert and ready to redirect the conversation to be more productive. Cannonball Another excellent devil’s advocate tool is called Cannonball, the goal of which is to “punch holes” in the idea, product, service, or process being researched. This tool is best used in a group setting with a moderator leading the discussion. Because participants are often shy at the beginning of the activity, they typically will punch holes gently, couching their thoughts as tentative suggestions. Don’t let that hesitation fool you; this activity can easily accelerate into a barrage of hole-punch attempts, which often leads into lively discussion and debate. Once again returning to our financial services example, Cannonball might focus on punching holes in the website developed to answer the target customer’s desire for convenience. Research participants might punch holes in the way the website functions, what services are available through the website, and the way a user has to navigate the website. 2 3 29
  31. 31. 30 Chapter 2 | The Role of Research in Design Thinking Using Cannonball comes with a cautionary disclaimer: the moderator needs to understand that the discussion could easily turn negative in tone, and he or she needs to be prepared to redirect the conversation or reset the tone when necessary to keep the activity productive. Summary This book was purchased by Research helps eliminate the dangers inherent in making assumptions, which can be detrimental to your success. Design thinking research m ­ ethods—both qualitative and quantitative—are affordable, accessible, and incredibly user-friendly, so you have no reason to skimp on it. The bottom line is that any of these research activities are frameworks for asking questions and getting answers that you can leverage to help you succeed. Remember, the only dumb question is the one not asked.
  32. 32. CHAPTER 3 Designing a Business Strategy Get Down to Business A business strategy is created to outline purposefully the path a business must take to achieve its desired outcomes. Behind your business strategy is a series of deliberate, data-driven decisions about markets, products, and services. It also involves your organization’s culture, from which your business goals, decision-making processes, and measurements of success evolve. When described this way, business strategy sounds energizing, dynamic, and meaningful. So why is it that the majority of business strategies appear constrained, confused, and stagnant? I place the blame squarely on the lack of design thinking, which should be brought to bear during the strategic planning process. The roots of design thinking are empathy, purpose, and adaptability, and working with design thinking principles is inherently dynamic. It would follow, then, that if you apply design thinking principles when developing your business strategy, it will be dynamic, flexible, and effective. A Strategy Is Born It’s exciting to see a business opportunity, and instinctively we want to rush to take advantage of it before anyone else does. In that rush, we gloss right over the due diligence needed to develop a sound business strategy and a viable business model. Once we’re neck deep in our business operations without those guides, we often realize that we have no clear vision
  33. 33. 32 Chapter 3 | Designing a Business Strategy for what we’re doing or where we want to go. Growth stalls, operations hit a tailspin, and we might even panic a bit. To avoid that downward spiral, we need to harness the excitement and channel its energy into smart, purposeful planning. ■■Tip  Clearly define your business opportunity with language everyone can understand. This should be a jargon-free zone. The first, most critical step is to define clearly the business opportunity. For the purpose of this book, I’m going to assume that you are familiar with SWOT (Strengths, Weaknesses, Opportunities, Threats) analyses and assessing the competitive landscape, two common and important tools used for identifying and articulating business opportunities. If you need a refresher or are starting from square one, an Internet search of those terms will yield thousands of useful results. My purpose is to introduce you to—and encourage your use of—design thinking tools that will add depth and additional insight as you develop and define your business strategy. Conduct your SWOT and competitive analyses first, because they will give you the foundation of information on which you can build your strategy. With those complete and in hand, you’ll be prepared to introduce the following three design thinking tools into your business strategy planning: Circles of Influence, Context Map, and Stakeholder Visioning. These tools will give you insight from three critical perspectives: 1. Yourself and your own network, 2. The world outside of your business and its influences, and 3. The key stakeholder groups involved in your venture. The information these tools yield is laced with opinion, and that is okay. It balances the data-driven information in your SWOT and competitive analyses. Circles of Influence We most often hear the phrase “circles of influence” in a persuasive context, such as sales or politics. For our purposes, the context is support and development of your business (Figure 3-1). The root of the Circles of Influence exercise lies in tapping into your personal, professional, and extended networks, identifying additional connections, and leveraging them to help you explore new markets, evaluate products and services, reach new customers, and more.
  34. 34. Design Thinking for Entrepreneurs and Small Businesses Figure 3-1.  Circles of Influence activity diagram If you are a sole proprietor, you can conduct the Circles of Influence activity on your own, but I encourage you to include others—close friends, your spouse, trusted colleagues, and mentors are good choices—but no more than four people. If you have an established leadership team that is larger than five people (you plus four others), you could consider working through this activity with a larger group, but you’ll need to be diligent in keeping everyone focused and productive to avoid the “too many cooks in the kitchen” outcome. As with all design thinking tools, Circles of Influence is best done through a visual exercise, but not just a boring list of whom you know. It is very hard to uncover connections in such a linear way. Use a dry erase board, a flip chart or poster board, or some other large surface on which you can write. Write your goal or purpose across the top, for example, “Launch our product with three companies of no more than 100 employees as a beta test.” Be as specific as you can. Under your goal statement, draw two large circles, leaving enough room between and around them to allow for written notes. Using a different color of ink for each circle is visually stimulating but not critical. In the center of left circle, write “Doers”; in the center of the right circle, write “Supporters.” Give your participants, including yourself, a stack of sticky notes (the best office supply item ever). Give each person a different 33
  35. 35. 34 Chapter 3 | Designing a Business Strategy color pad of stickies, which will be helpful in understanding the dynamics of potential connections. Starting with the Doers circle, have the group think of people they know who can provide specific, task-oriented help to achieve your goal. Each person needs to be named specifically—“James Smith in human resources at Company ABC” versus “someone in human resources at Company ABC.” As each participant in your group thinks of a doer, he or she writes the doer’s name on a sticky note and places it in the Doers circle. Once the group has thought of everyone possible, they collectively evaluate and discuss how connecting with each doer would be advantageous. Would the connection be mutually beneficial? Does the person know other potentially helpful people with whom your team could connect? Where can you plug these contacts into your strategic approach so you can get closer to accomplishing your goal? Work together to identify whom to speak with first from the Doers circle. Who is the easiest person to talk to with the best return? Take notes during discussion so you don’t lose any of these details, or better yet, audio or video record it as you would a focus group. Now move on to the Supporters circle and follow the same process with specificity in naming the people who belong in that circle, such as “Anna Knutz with ChemPro.” The difference between the Doers and Supporters circles is subtle but distinct: the people in the Supporters circle might not be able to do something specific to benefit your business strategy, but they provide thought leadership, support, enthusiasm, and a willingness to go the extra mile for you if asked. Not everyone in the circles will provide value in the way you hope, and that’s all right. Focus on the successes. In this example, perhaps it turns out that James Smith was delighted to be a beta tester, and Anna Knutz provided wise counsel that kept you on track. ■■Tip  During the Circle of Influencers activity, don’t forget to look for people who belong to both circles. They are incredibly valuable connections because they can assist with something specific as well as provide support. Context Map For the majority of us, when we are working on a challenging situation— and developing a business strategy certainly qualifies as challenging—it is truly difficult to see the bigger picture. We see the details we are most concerned with and miss others entirely. The cliché, “You can’t see the forest for the trees” is the perfect descriptor.
  36. 36. Design Thinking for Entrepreneurs and Small Businesses Dave Gray, coauthor of Gamestorming,1 has said, “We don’t truly have a good grasp of a situation until we see it in a fuller context.” The Context Map activity is designed to provide that bigger context. It is based on the premise that once you have a larger, systemic view of the environment in which your business is operating, you’ll be better prepared to plan for and anticipate business and market needs at a larger scale. The Context Map activity is interactive and requires some advance preparation on your part to get the most out of it. The group will drive the contributions and final outcome of the activity, but as the leader, you’ll be responsible for spurring them along with relevant and thought-provoking questions. The goal is to describe the external environment in as much detail as possible, with the intent that the group can respond proactively, rather than reactively. The context map will help your team see the forest, not just the trees. Figure 3-2.  Context Map activity diagram ■■Tip  Consider the Trends section as “square one,” and start developing your context map from there. Dave Gray, Sunni Brown, and James Macanufo, Gamestorming (O’Reilly Media, 2010), p. 84. 1 35
  37. 37. 36 Chapter 3 | Designing a Business Strategy The Context Map exercise always begins with an outline of current trends. The other sections of the map can be completed in any order. Rather than directing the group, I recommend you let them dictate the order after the Trends sections are completed and pay attention to the workflow. The areas that generate more content are fair indicators of where the team’s focus and energy lie. Occasionally, the conversation drifts into analyzing the internal context—what’s happening within your organization—so you may find it necessary to redirect the conversation. Remember, the Context Map exercise is best used for external exploration. You’ll need flip-chart paper, markers, and an expanse of wall for this activity. You can draw the necessary elements, which are described in more detail next, on the flip chart ahead of time and then post it on the wall, or post the paper first and then draw—whichever is easier for you. For the purpose of explanation, let’s assume you are posting the paper first and then drawing. Post six large sheets of paper on the wall so you have two rows of three columns. In the center of the top middle sheet, draw something that represents your business, for example, a place setting if you own a restaurant or a computer if you own a software company. It doesn’t have to be elaborate. Then, label the picture appropriately with your company name (which helps if your drawing skills are marginal). On that same piece of paper, in the upper left corner, write “Political Factors.” In the upper right corner, write “Economic Climate.” On the top left and top right sheets of paper, draw several long arrows pointing toward the center sheet, leaving enough room between them to add notes later. Label these sheets “__________ Trends,” leaving the blank empty. Later in the activity, you’ll name the trends. On the bottom left sheet, draw more arrows (again, with space in between), this time pointing up and to the right toward the top middle sheet. Label this sheet “Technology Factors.” On the bottom middle sheet, draw an image that represents your primary customer and label the sheet “Customer Needs.” If you have more than one customer group you want to explore in this activity, add an additional sheet below that one and draw something representative of that second group. Don’t include more than two customer groups in the context map, or the activity will get unwieldy. On the bottom right sheet, draw arrows pointing up and to the left toward the top middle sheet, and label that sheet “Uncertainties.” Now you’re ready to bring in your team and get started. Introduce the Context Map activity and explain its purpose: to help the team define and understand the bigger picture in which the business functions. Start with the Trends sections and have the team contribute the content while you add their comments to the sheet. Once the team feels the current trends w
  38. 38. Design Thinking for Entrepreneurs and Small Businesses have all been captured, move on to another section, but let them choose which one. Follow the same process—contributing content and comments—for the remaining sections, one at a time, until they are all complete. Using the illustrated example of JDI Deep Sea Excursions, Trends might include statements such as “25 percent increase in fishing gear sales in the last year,” “Families spending more time on outdoor activities,” and “Self-sustaining food movement = more gardens . . . more fishing?” Political Factors for JDI may include legislation that restricts fishing in particular areas or lobbying groups that actively campaign against leisure fishing at sea. The economic climate might include the rising cost of fuel and the increased cost of permits. The Technology Factors section for JDI could include needing a stronger presence on the Internet or investing in developing technology to improve locating schools of fish. For the Customer Needs section, JDI may identify their primary customers as males above age twenty-five and list among its needs the desire to be able to book an excursion online. In the Uncertainties section, JDI will capture factors affecting its business that are still unclear, which could be pending legislation that will severely limit the number of fish allowed to be caught or how much the cost of fuel will rise. Once all of the sections are complete, go back to Trends and review the team’s original contributions in the context of the completed map. Do any of those identified trends need to change? Are they all on point? For example, if your team isn’t confident that the self-sustaining food movement has exerted enough influence in the market to affect your business, they may choose to remove that trend from the map. Make any adaptations as necessary and then, as a team, come up with a description for those trends in the blank space. To close the Context Map activity, lead the group through a summary discussion of what occurred and solicit feedback along the lines of insights, a ha! moments, and areas that need further exploration. The last step is to agree as a group that the context map is the most accurate representation of the environment in which the business is operating. I often encourage teams to leave the context map posted for several days following the activity for reinforcement, as long as it can be posted in an area away from clients, vendors, and potential competitors. Stakeholder Visioning Every business has multiple groups of stakeholders who have ­ arying v degrees of vested interest in its success and perspectives on what that success looks like. Stakeholder Visioning, when used in developing a 37
  39. 39. 38 Chapter 3 | Designing a Business Strategy b ­ usiness strategy, provides a 360-degree review of your business from the multiple perspectives of your stakeholders. It also gives the participants an opportunity to relate intuitive knowledge and subject matter expertise. With these multiple perspectives, you can explore possible futures and uncover potential gaps that could impede success. Divide your team and assign them to a stakeholder group that they will represent during the activity. You’ll have at least two groups: customers and employees. Depending on the nature of your business, you may want to include others, such as vendors, community members, shareholders, investors, or mentors. Have them sit together in their new groups, and consider having each participant wear a nametag with their group name on it, for example, “Customer,” or in some other way indicate each group so that participants are clearly identified and no one gets confused. Ask them to step into their roles and imagine your business—and their involvement in it—five years in the future. What will the business be like? What will they value as a group? What trends do they think will have emerged? What do they think the competitive environment be like? What specifically will have changed over those five years? Have the participants write their responses on sticky notes, one thought per note. If it helps them communicate their ideas better, than can illustrate the notes, as well. Then have each group present their perspectives. For example, an employee might value increased profits and be concerned that the business may become less competitive in five years, whereas a vendor might value the opportunity to diversify its own business by working with yours and might see a potential permanent partnership in five years. Once each stakeholder group has presented, ask the participants to step out of their roles and review the perspectives from their own points of view. Sort the sticky notes into common themes. Within those themes, have the team identify any opportunities that can be incorporated into your business strategy now to capitalize on future potential. ■■Tip  If time allows, cycle through the Stakeholder Vision activity several times so that your team has the opportunity to adopt multiple roles. Summary A sound business strategy is critical to success, and traditional means of planning a strategy are no longer sufficient. Developing a plan to keep your business viable and resilient in a volatile marketplace needs design thinking. When you add design thinking tools to the process, you can push your business strategy to be more robust and comprehensive.
  40. 40. CHAPTER 4 Designing Live Customer Experiences Maximizing “Face Time” One of the more visible ways design thinking can be manifested is through live customer experiences, meaning the ways a customer interacts with your brand and business in person. In fact, now that the customer experience has become recognized as an important part of the success of a brand, a specialized marketing discipline has emerged: experiential marketing. Experiential marketing allows customers to engage and interact with brands, products, and services in a sensory context, helping them connect with the brand in meaningful, personal ways. These personal interactions and the connections they build lead to informed purchasing decisions. Designing live customer experiences propels your brand beyond the narrative of the features of your product or service; customers experience the benefits firsthand. You can leverage design thinking tools to create brand interactions with purpose and meaning, and to do that effectively, you must be able to empathize with your customer. Quite simply, if you were your customer, what would your expectations for your brand be? How would you want to interact with your brand and business? What would you want to derive from that interaction? What would you want to feel afterward?
  41. 41. 40 Chapter 4 | Designing Live Customer Experiences From the physical space your brand occupies to customer service processes to employee training, every touch point with a customer is an opportunity to showcase your brand, set the tone of the customer conversation, and build loyalty. Your Bricks-and-Mortar Location This book was purchased by If your business has a physical space—an office, warehouse, retail store, or open space—this is where a brand’s first impressions are often made. Putting some thought into how your brand interacts with a customer in a physical space is particularly important for those businesses with revenue models that rely heavily on person-to-person transactions. Let’s put this concept into personal terms as an example. Imagine you are hosting someone very important at your home for dinner. Perhaps they are your future in-laws, your banker, the chairman of a nonprofit on whose board you serve, or a prospective new executive you are considering hiring. You want to put your best foot forward, right? You give your house a thorough cleaning, arrange freshly potted flowers on the front porch, set the table with your best china, and maybe even check to be sure your medicine cabinet doesn’t contain anything questionable. We’ve all done this (or similar things) because we wanted our guests to feel welcome and comfortable, but also because we wanted to portray ourselves—our personal brand—in a certain light. Now let’s put this in business terms. Imagine you are hosting a potential customer for a meeting at your office, during which you hope to close a deal that will result in doubling your gross revenues for the fiscal year. Is your office designed to provide the type of experience with your brand that you want that customer to have? Or is your space somewhat haphazardly put together without any consideration of your brand? If your physical space is a retail store, is it welcoming without being overwhelming? Is it designed to engage customers as they navigate the space? Is your team trained to provide a specific interpersonal experience for customers? To evaluate your brand experience in terms of physical space, as honestly as possible, put yourself in your customers’ shoes. Better yet, recruit a few of your leadership team and friends to join you and gather several perspectives. For illustrative purposes, I’ll use a retailer as the first example, because I believe retail is one business sector with the most to gain when the live customer experience is designed. Start evaluating from the parking lot: is the area clean, and does it feel safe? Is your entrance well marked, attractive, welcoming, and free of debris? These points seem basic, but they are essential and often overlooked.
  42. 42. Design Thinking for Entrepreneurs and Small Businesses ■■Tip  Don’t give a trashy first impression. Make sure your parking lot or car park, sidewalks, and breezeways are clean and debris-free. Next, evaluate the customers’ experience when they arrive at your store. Do the interior design, merchandising, and product selection align with your brand? For example, if your business is a specialty running store and you’ve defined your brand as approachable, egalitarian, and friendly, does the interior of your store support that brand message with open spaces, welcoming but energizing colors, and places to sit? Does your product selection appeal to beginners as well as experienced runners? Does your merchandising and signage encourage the customer to explore your store? Is the lighting appealing and sufficient? If you have a music system, what’s playing? I had a completely incongruous experience in a specialty running store in Scotland, in which the system was broadcasting country-and-western music with predominantly slow tempos not at all conducive to running. Rather than feeling energized, ready to run, and hyped up for new gear, I felt slower, more relaxed, and in no hurry to make a purchase—certainly not the customer experience the brand intended. What if you have an office rather than a retail space? The approach is similar. Start from the parking lot and work your way inside. If your office is on an upper floor, take the elevator and perceive it through your customer’s viewpoint. Is it too slow? Do the doors close too quickly (especially important if your customers tend to be older or physically challenged in some way)? Once you arrive at your office, does your reception area or lobby reinforce your brand? For example,a conservative health care corporation may furnish its lobby in traditionally styled, dark wood furniture accented with oriental rugs and classic still-life painting reproductions. A cutting-edge architecture firm, on the other hand, may design its reception area with reclaimed materials, ultra-modern furnishings, and colorful, original artwork. If the physical setting of your reception or lobby is incongruous with your brand message or devoid of any attention to detail, then the customer experience is one of confusion and uncertainty, which is not the first impression you’re counting on. Carry this evaluative process throughout the public spaces of your office or retail space, and pay attention to detail. Restrooms, dressing rooms, conference rooms, and work areas are opportunities for reinforcing the experience you purposefully design. They are also where an experience that started off beautifully can deteriorate, sometimes irrevocably. 41
  43. 43. 42 Chapter 4 | Designing Live Customer Experiences Color Theory and You Color is important as the effects are instantaneous; for example blue connects the human mind to the universe and alleviates any sense of tight enclosure or claustrophobia that could occur in a windowless environment. —Leatrice Eiseman, director of the Eiseman Center for Color Information and Training1 Explanations of color theory are plentiful on the Internet, and you can find a much deeper history of its evolution and role in marketing, as well as behavioral science. Here I’ll touch lightly on how color theory comes into play with regard to designing physical space, and color’s effects on live customer experiences. Simply put, color theory attempts to explain what feelings specific colors evoke and why. I say “attempt” because color is a highly subjective design element. The emotion a color evokes in one person could be markedly different in another. The reaction to color can be influenced by personal preference as well as cultural perspective. ■■Tip  Avoid the tendency to design your office or store based on your personal preferences, especially when it comes to color. Put your brand’s identity and personality before your own. There are widely accepted generalities that you should consider when evaluating your physical space in terms of the customer experience and supporting your brand. You’ll notice that some colors seem to evoke feelings that are quite different from each other, a result of how—and how much—the color is used in design. Warm Colors Warm colors include red, yellow, and orange and generally convey passion, happiness, enthusiasm, and energy. • Red, a primary color, and its various hues can be used to communicate power and passion, as well as danger. Brighter reds have more energy; muted, darker reds have more elegance. Personal conversation with author. 1